P$3\mathrm{.}6($LO $1,2,3)($Retained Earnings Statement, Prior Period Adjustment$)$ Below is the Retained

Earnings account for the year $2025$ for Acadian Corp.

Retained earnings, January $1,2025$

$$257,600$

Add:

Gain on sale of investments $($net of tax$)$

Net income

Refund on litigation with government, related to the year $2022$

$($net of tax$)$

Recognition of income earned in $2024,$ but omitted from income

statement in that year $($net of tax$)$

Deduct:

Loss on discontinued operations $($net of tax$)$

Write$-$off of goodwill $($net of tax$)$

Cumulative effect on income of prior years in changing from LIFO to

FIFO inventory valuation in $2025($net of tax$)$

Cash dividends declared

Retained earnings, December $31,2025$

Instructions

a$.$ Prepare a corrected retained earnings statement. Acadian Corp. normally sells investments of the

type mentioned above. FIFO inventory was used in $2025$ to compute net income.

b$.$ State where the items that do not appear in the corrected retained earnings statement should be

shown.